Coalition and Labor to talk turkey on China-Australia free trade deal

A sudden thaw in the protracted stand-off over the China-Australia free trade agreement has raised the prospects of the deal passing into law before the end of the year, prompting the swift deletion of up to $600 million in Chinese trade barriers favouring its local producers.

A substantial backdown by Labor which now proposes relatively minor changes having previously depicted the trade pact as a bad deal for Australian workers, has been met by a new flexibility under Malcolm Turnbull's leadership.

Malcolm Turnbull has compiled a list of innovators he can talk about later this year. Photo: Andrew Meares

Mr Turnbull, Opposition Leader Bill Shorten and Greens leader Richard Di Natale came together for a unanimous multi-faith commitment, and, former prime minister John Howard did his bit for government healing by lavishing praise on Mr Turnbull.

Mr Turnbull also ceded some ground, telling Labor its proposals for reining in generous superannuation concessions would now be included in the government's comprehensive review of the tax and transfer system.

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"Now all of these matters are under consideration by the government," he said overturning his predecessor's edict that super would not be included.

The Labor caucus agreed to the China compromise on Tuesday following consultations led by trade spokeswoman Penny Wong.

The package has been designed to satisfy Labor/union concerns over Australian jobs while meeting the government's bottom-line requirement that the text of the agreement, an associated memorandum of understanding, and any side letters, remain unchanged.

The government has argued any tinkering or proposed re-opening of the agreement itself would invite the Chinese to simply walk away.

While a small target strategy may have worked against Tony Abbott, Bill Shorten needs a new approach against Malcolm Turnbull. Photo: Alex Ellinghausen

Labor's new approach, which the government has characterised as unnecessary but probably harmless as it is consistent with elements already specified, would lift minimum wages of foreign workers from the current fixed $53,500 annualised minimum salary to $57,000 (indexed), strengthen trade certification requirements of imported tradespeople by making their qualifications a pre-requisite of their visas, and strengthen labour market testing before foreign workers could be hired for major investment projects over $150 million.

Ms Wong said: "We recognise the benefits of the [China-Australia deal], which does remove tariffs on Australian exports and will boost our farm exports and so forth and improve access to services."

Mutual admiration: Mr Turnbull with former prime minister John Howard during the launch of the John Howard Walk of Wonder at science and technology centre Questacon in Canberra on Tuesday. Photo: Alex Ellinghausen

Trade Minister Andrew Robb and Immigration Minister Peter Dutton will now enter into more detailed closed-door negotiations with Labor on the proposals.

Speaking in Parliament, Mr Turnbull and Mr Robb all but confirmed the changes would be accepted in some form.

Chinese President Xi Jinping (rear) and then Australian prime minister Tony Abbott witness the signing of the declaration of intent on the Australia-China Free Trade Agreement late last year.

"I thank the Leader of the Opposition for his latter-day brush with reality and his preparedness to actually get down to talking about the real issues that confront Australians," he said.

Mr Robb reinforced that position, observing that Labor had "accepted that nothing in the agreement, and nothing in the MOU and nothing in the side letters, nothing will change".

"We thank you for that," Mr Robb told Parliament.

"What we are seeing by those opposite," he continued, "which we're happy to entertain and to look at, is can we provide any more clarity or can we provide any more comfort around an agreement which is rolled gold and rock solid."

Earlier in the day, Mr Turnbull, who is struggling to unite a riven party room after the September move on Tony Abbott, received a glowing reference from the most revered of all living Liberals.

"I congratulate Malcolm Turnbull on the enthusiasm that he brings to the cause of the future," Mr Howard enthused.

"We need optimism in this country, we need optimism about our human future, we need optimism about our economic future and we also need optimism about the capacity of the men and women and children of Australia to tackle issues of science and issues that will shape the lives we live."

Labor's proposal for the China deal would amend the 457 visa class within the Migration Act, which will determine the entry of Chinese workers into Australia under the deal. The 457 system would now require:

Employers entering Investment Facilitation Arrangement work agreements under the trade deal to advertise jobs locally before turning to overseas workers.

The minimum base rate of pay for 457 visa workers to be $57,000 a year.

Foreign workers in trades like electrical work or plumbing to obtain the relevant occupational licence or registration within 60 days of arriving in Australia.

Fairfax Media last week revealed research by a former Rhodes scholar and Adelaide University academic, Dr Joanna Howe, who found that if the free trade deal proceeds without labour market protections, the Turnbull government would "effectively surrender autonomy over its migration laws" and invite a wave of Chinese workers into Australia, driving down local wages and conditions.